Tenant Fraud Rises – how resilient is your office?

tenantriskverification February 16, 2012 0

47% of all repossessions due to rent arrears 80% took nearly 5 months to get the tenant out. 275 people a day succumb to impersonation or identity fraud. An increase of 22% in the first half of this year, that’s over 50,000 victims already. The most frustrating thing about tenancy fraud is how easy it is to prevent! An improved referencing service with Let Insurance ‘Potential for Fraud Indicator’ can seriously reduce the risk of you being defrauded!


Tenant fraud is a symptom of the times and it is likely to increase as Government cuts take effect. We look at ways to reduce the risk of your staff being misled. Fraudulent tenants are very difficult to evict as they seem to know their way round the legal system. Good agents will have a checklist that includes obtaining ID documents and proof of current residency at an early stage of the tenancy application, and to be alert for anything possibly unusual that could increase the risk for the landlord.

Identity fraud has increased by 22% in the first six months of 2010 and there were over 50,000 victims of impersonation in the same period. This is the equivalent of 275 a day.


Anecdotal evidence from all over the country also shows a rise in deliberate fraud cases. Applicants are filling out tenancy application forms fraudulently as they move from property to property with no intention of keeping up with the rent. It is not unknown for this to happen within the same small town. They give false information on where they have been living previously to confuse referencing companies and letting agents.

“It is an understandable problem faced by the staff in every lettings agent.   It is natural not to assume the worst in people and to give them the benefit of the doubt,” said Michael Portman.  “Our referencing service includes a Potential for Fraud Indicator and, if there are any doubts, agents can talk through applications with Let Insurance Services staff. They are removed from personal contact with the prospective tenant and are trained to spot anomalies, oddities and the potential for fraud in tenancy applications.”

Due diligence – Tips that will help you reduce fraud:

  • Obtain a credit check – Individuals with good credit histories are generally good tenants.
  • Obtain landlords and employment references. Don’t forget that some Landlords just want to get rid of their problem tenants and will therefore give good references. Are the referees genuine?  Phone the telephone numbers given and check the previous landlord’s details.
  • Ask the applicant to provide further proof. For example copies of payslips or sight of bank statements if you have any doubts.
    Make sure that your tenancy application forms are completed in full. If an applicant only completes part of it, they may be hiding something.
  • Don’t take everything at face value. Don’t believe anything that you are told or what is on the application without independent verification.
    Aim to pick up lots of information about the applicant when showing them the property. For example, what kind of car does the prospective tenant drive?
  • Take the time to compare addresses shown on the application with those shown on the ID documents. Ask for previous utility and telephone (including mobile phone) bills and statements, and check if the name and address and other information matches the information on the application form. If not, why not?
  • Use common sense and gut instinct this can also be a valuable tool when deciding whether or not you want to rent to a Prospective Tenant.
  • Adopt internal procedures including a checklist for screening applicants before they go through the referencing process and train everyone from managing director to part time staff on this. If a fraudulent applicant spots a weak spot in your processes they will use it and may tell other potential fraudsters.
  • Use a checklist that includes obtaining ID documents and proof of current residency which you can file online on the Let Insurance Services referencing system. Ask us for more detail.
  • Beware subletting with tenants have allegedly moved in. Make sure that when you carry out your periodic property maintenance checks that the occupier is the same as the name on the tenancy agreement. There are horror stories of seemingly good tenants not moving in and subletting the property for profit.
  • Take out insurance for legal costs to evict the tenants.
  • Take out insurance for legal costs to evict the tenants.
Source: let-insurance

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